In a frightening example of how the Mexican drug cartel has infiltrated American society, the FBI arrested seven members of the cartel on Tuesday in New Mexico with evidence that the cartel has laundered millions of dollars in the American horse racing industry. Jose Trevino Morales, his wife, and seven of their associates were arrested at their stables and charged with one count each of money laundering.
Trevino’s older brother, Miguel Angel Trevino Morales, is the second in command of the Zetas drug cartel, which is known for its vicious brutality, including kidnapping, decapitating and dismembering enemies. Miguel uses techniques on enemies such as the "guiso," or stew, in which enemies are placed in 55-gallon drums and burned alive.
The laundering operation spent millions of dollars to buy, train, breed and race quarter horses in the Southwest. Richard Weber, the chief of the IRS' criminal investigation unit, said, "This case is a prime example of the ability of Mexican drug cartels to establish footholds in legitimate U.S. industries and highlights the serious threat money laundering causes to our financial system."
The indictment states that the Trevino brothers and their group quietly arranged to buy quarter horses with cash while using aliases. Yet there were brazen aspects to the operation; some of the horses had names like Number One Cartel and Coronita Cartel. One of the cartel’s horses, Mr. Piloto, won a $1 million prize at Ruidoso Downs on Labor Day 2010, going off at odds of 22-1. His trainer, Felipe Quintero, 28, was one of the cartel’s members arrested Tuesday.
The U.S. Embassy in Mexico issued a travel advisory Tuesday, warning U.S. citizens in Mexico to maintain a low profile because there could be retaliation.
The cartel paid high prices for the horses, and had a reputation for paying their bills. Debbie Schauf, the director of the Oklahoma Quarter Horse Racing Association, said:
They were also recognized for taking care of their business. They paid their bills and didn't cause any trouble. You didn't have a food vendor or veterinarian calling to say they couldn't get these guys to pay their bills. They were good citizens in the horse industry. It didn't raise a lot of eyebrows when these guys came to the sales and started paying cash. What raised eyebrows was the quality of the horses they were buying and the amount of money these mares cost.
The FBI knew whom they were dealing with; when they raided the racetrack they wore bulletproof vests while they collected the evidence. Forty-one horses, including Mr. Piloto, had seizure warrants placed on them so they could not be transported to Mexico.
The chief of the IRS Criminal Investigation unit, Richard Weber, attested to the danger of the cartel’s involvement, calling their actions a “prime example of the ability of Mexican drug cartels to establish footholds in legitimate U.S. industries.”
James Phelps, a Southwest border expert, said horse racing would seem a perfect place to hide funds:
When you have hundreds of billions a year in your industry and you can’t ship the bulk of the cash back, it has to go somewhere. They are buying huge ranches in locations across the Southwest and mountain states. It’s just a very viable way to launder the cash.